The announcement on Feb. 12 that Flint Group will acquire Torda Ink AB, a leading packaging ink supplier in parts of Europe and the Middle East, strikes me as a clear sign of the times. The transaction is expected to close by the end of March 2010, subject to the approval of the antitrust authorities.

Founded in 1947, Torda is a solid mid-sized company, with €23 million ($33 million) in sales in 2009. While the company does manufacture some heatset and coldest news inks, its main business is packaging, with sheetfed, solvent-based and water-based flexo and gravure inks. The company’s main markets include food and beverage packaging, tissues and paper products as well as corrugated. The company is also well known for its service to these markets.

Torda is unique in its selection of manufacturing locations. Its headquarters are in Lund, Sweden, and it has concentrated the vast majority of its efforts in northern Europe, with subsidiaries in Denmark (Torda Ink AB) and Finland (Torda Ink OY). The company also has a subsidiary in the Balkans (Torda-Zvezda in Serbia) and in the Middle East (Torda Middle East LLC, located in Dubai in the United Arab Emirates).

For Flint Group, adding Torda Ink is a solid move. The packaging market been relatively strong compared to the troubled publication field, and acquiring a company noted for high quality and service is a plus. Torda also gives Flint Group an added presence in parts of the EMEA region, which may help the company proceed with its reported efforts to prepare for an initial public offering (IPO) on the Frankfurt Stock Exchange later this year. For Torda, Flint Group offers a comprehensive product portfolio and leading market positions globally.

Dr. Dirk Aulbert, president of Flint Group’s global Packaging and Narrow Web division, noted the benefits of the acquisition.

“We are delighted about the agreement with Torda. The company’s business model and performance is an excellent fit for our strategy,” said Dr. Aulbert. “Torda’s setup, especially in Eastern Europe, the Balkans and the Middle East, ideally complements and expands our network of manufacturing and service facilities into these growth markets.”

Eastern Europe has offered stronger growth than its western counterparts, and Flint Group has made a concentrated effort to expand its reach in to the region, beginning in 2009 with the acquisition of acquired Premo Inks, a Russian packaging ink manufacturer and distributor.

In a major move, in January 2010, Flint Group announced the expansion of its liquid packaging and sheetfed inks operation in Konstantynow Lodzki, Poland to better serve the Eastern European region. The enhancements included a new warehouse, blending areas for solvent- and water-based inks and a sheetfed mixing area.

M&A Trends in Packaging Inks

This acquisition fits in with the merger and acquisition pattern seen in the past year in the ink industry. In the past 12 months, there have been three acquisitions of mid-sized packaging ink manufacturers.

In June 2009, Sun Chemical acquired Handschy, an approximately $30 million company, from its parent company, Graphic Packaging International, Inc. In July 2009, ALTANA acquired Water Ink Technologies, with sales of $34 million. In all three of these acquisitions, the packaging ink market was the key target. Meanwhile, there has been little activity on the publication and commercial ink side, despite the overcapacity in the market.